Audit Your Real Estate Lease Agreements

They can often be interpreted as fixed or static, and many hospitals don’t immediately see any possibilities to reduce costs associated with them.

As a result, real estate leases are often an overlooked opportunity for hospitals and their savings.

It’s not always a function of price either. In fact, it’s primarily an audit function because these leases often have many moving parts.

There are significant costs in CAM charges, the charges that sit outside of the base rent or are not reflected in a credit. It’s important to keep a pulse on and get clear on utility costs, snow removal, lawn maintenance, and other fees that sit outside of the actual rent cost. CAM charges can often add 30%-40% to a hospital’s lease costs.

And, if a particular element of a real estate lease contains an error that hasn’t yet been uncovered, there’s a capacity for that error to be compounded each year if it isn’t addressed, leading to a greater increase in costs.

Hospitals also tend to put a degree of trust in their outsourced property management companies. However, in our experience, these companies are often not doing an in-depth analysis of bills. They’re simply focused on getting the bills paid, which again can lead to unclaimed opportunities in reducing costs.